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Judge denies Chabad request for disputed $18-million pledge [Updated]

February 24, 2011 |  8:35 am

A Los Angeles Superior Court judge tentatively denied an $18-million claim involving a pledge the president of Chabad of California Inc. said was verbally promised by a prominent philanthropist before his death.

Judge Mary Ann Murphy said Tuesday she found little evidence that Roland Arnall made a pledge to Rabbi Boruch Shlomo Cunin for the construction of a Chabad educational center in Westwood before he died in March 2008 at age 68.

After Arnall’s death, Cunin claimed the pledge became the obligation of Arnall’s widow, Dawn Arnall. According to Murphy’s 69-page proposed statement of decision, it was up to Chabad to prove through a “preponderance of evidence” that Arnall actually promised Chabad $18 million.

Murphy ruled that Chabad’s lawyers failed to offer proof during a non-jury trial late last year, citing “discrepancies and lack of corroboration.”

The case had been under submission since early November. The decision becomes final within 15 days unless the judge agrees to charges based on objections from attorneys.

Dawn Arnall claims she knew nothing about the alleged $18-million pledge until after her husband died and Cunin started asking about the money. In the past, the couple made various donations to Jewish and non-Jewish organizations.

Her attorney, John S. Gordon, told Murphy that Cunin lied about being surprised by Arnall’s death. The rabbi also denied being told two days before Arnall’s death that his health was quickly fading.

Marshall B. Grossman, the Chabad's attorney, told the judge the Chabad spent more than $800,000 in planning costs for the building project, expecting reimbursement from Arnall’s pledge.

Cunin testified that Roland Arnall verbally promised to donate at least $18 million in 2004 and 2008 to build what was to be called the Arnall Family Center. Arnall, who helped create Orange County-based Ameriquest Mortgage in 1979, faced major financial problems during the subprime market crisis.

Gordon said the Arnalls paid $325 million to settle actions brought against the company in 49 states.

From March 2006 to March 2008, Arnall also was ambassador to the Netherlands under President George W. Bush.

The Chabad actually sought $17.5 million in the case, which it claimed was the balance due on Arnall’s $18 million pledge after he made three payments of $180,000 to the organization.

[For the record, 8:45 a.m.: A previous version of this post provided the incorrect name for Dawn Arnall's attorney as John S. Grossman; it is John S. Gordon. It also incorrectly stated that Arnall's attorney told the judge the Chabad spent more than $800,000 in planning costs for the building project; Marshall B. Grossman, the Chabad's attorney, told the judge about the planning costs.]

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-- Nate Jackson

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